Differences between Term Life Insurance and Permanent Life Insurance
Compare life insurance to the home buying experience. Term Life Insurance is like renting and Permanent Life Insurance is like owning your home.
Term may be appropriate for a young breadwinner in their 20’s with a spouse and baby, but if you have any sort of assets, permanent is the way to go. With Term Life Insurance, once the term is over, you do not have any insurance and your health and therefore your cost of insurance may not determinable. Worse yet, you may be uninsurable.
With Permanent Life Insurance Insurance you can build up cash value and pass on assets to your spouse tax free and you can get your policy guaranteed for life.
The reason why so many people buy term, is because it is an easy sell. The salesman sell the death benefit.
But there are so many great things that you can do in regards to structuring your business and estate so that your beneficiaries will retain maximum value after you pass on with Permanent Life Insurance.
5 Great Benefits of Permanent Life Insurance
I will lust 7 great benefits that Permanent Life Insurance has:
Death Benefit that increases – I won’t need to worry about renewing my term or losing an asset in my families’ life when my term insurance comes up – it is permanent – it will go to my family, church or charity when I leave this planet.
Disability protection – every dollar that goes to my permanent policy is protected from disability. Even if you own disability insurance -how many of you can say that if they became disabled their 401K, RothIRA, and 529s will continue to be funded? Waiver of premium protects every dollar I put into my policy in the event of disability.
Guarantees – Unlike the stock market, bonds, etc.. I have contractual guarantees in my policy – I don’t need to lose sleep about the market swings and losing principal – in fact – since I own a policy from a mutual LI company I recieve dividends every year that are projected to give me a net return of 6% – with no 1099 tax – in my tax bracket that equals a 9+% taxable rate of return with no risk.
Creditor Protection – in my state, my cash value is 100% lawsuit protected – ***not all states have this protection.
Liquidity – access to Cash Value – no penalties or taxes if cash is accessed correctly – you can’t say that about government controlled retirement plans – in fact I can use my policy value to get in and out of the stock market at my control.
Asset Maximization – I have an asset (Death Benefit) that never goes away – it gives me infinite number of options to spend down my assets instead of merely living off the interest in retirement. You are correct to say that you won’t “need” life insurance in retirement if your house is paid off, kids are gone, etc.. but for this reason alone you may “want” life insurance.
Flexibility – I can put more money in, stop putting money in, have the policy pay for itself – take cash free dividends, etc…
Another benefit I do like about a Permanent Life Insurance compared to putting all my eggs in a 401k, or Roth IRA (that you need) the Permanent ife Insurance built up cash is touchable money. Qualified money can not be touched till age 59 1/2.
If all of this were so over complicated then why doesn’t everyone just rent their homes and not buy them? Why do people get suckered in Level 30 or Level 20 life insurance products only to NOT have insurance after 20 or 30 years?
I’ve met far too people in their 50’s & 60’s who wish they still have their life insurance.
People are extending their mortgages well into their 60’s & 70’s. With a quality Permanent insurance product, the break even point is usually 15 years. This is the point where the dividends from the cash value will ultimately pay for the policy for the rest of your life. This concept is overlooked. There are several companies that offer an average 6.5 – 7.5% fixed for 365 days without market fluctuation.
Talk to a professional. In most cases it cost no money for someone to evaluate your life insurance need, so get multiple opinions.
The truth of the matter is constant: You may not need any life insurance EVER! What you need is money; and life insurance is the cheapest and most effective way to create that money.
If you wish to review your currently Life Insurance Policy or discuss questions you may have, please contact us by phone at 813 964 7100 or 716 565 1300 r email us at email@example.com
Visit our website at www.MintcoFinancial.com